With an integration between tools like your restaurant accounting software and your payroll provider, automatic systems that create labor accrual journal entries can help streamline the time-consuming process. By cross-training your team, you can reduce the number of employees on a shift without losing productivity. For example, assigning a hostess the manager’s duties on slow days will reduce your labor costs tremendously. Even paying this person a few dollars more per hour during these situations will cost less than scheduling a manager for an entire shift. To control your labor costs in the long-term, consider taking advantage of tools like sales forecasts. With these informed forecasts in hand, you can better match your employees to busy and slow times when you make your staff schedules.
Rest Day Laws
All of those costs are variable, and shouldn’t be taken as hard and fast rules. They can be used as guidelines to see if your restaurant is hitting close to the mark. If you run a fast food restaurant with labor costs hitting 40% of your sales, you may want to make some adjustments to bring that cost down. Casual establishments, like counter-service cafes or fast-food restaurants, often have lower labor costs. But a fine-dining restaurant is going to need to spend more on labor, because the service demands made on staff are so much higher. Fine-dining staff often need special skills, experience, and a talent for providing the best service, and they expect to be paid accordingly.
Calculating your labor cost percentage
The urban poor’s loss became the fast food industry’s gain, as the policy opened a new pool of labor in areas where they had been lacking workers. When I Work also includes automation capabilities and user-friendly schedule templates. You can create all of your schedules directly in the platform and ensure everyone knows when they are supposed to be at work. Having a strong restaurant culture reduces staff turnover and boosts restaurant sales.
Integration with time clock software
Funds need to be left over to cover other expenses like rent and marketing. If your labor cost percentage is high, there are a number of things you can do to lower it, like using staff scheduling software and implementing helpful restaurant technology. The more efficiently your team works, the more they can do in less time. Boosting your training and cross-training efforts are effective strategies for maximizing your labor spend per employee and lowering your labor cost percentage. There are lots of tasks that restaurant technology can assist with to lower labor costs and boost sales, ultimately resulting in a lower labor cost percentage.
Known as intraday polling, this technology enables restaurant managers to make hourly Labor decisions based on the amount of current sales each day to reach optimal labor performance. Your payroll is the process of calculating and distributing payroll for restaurants wages to your employees. Plus, you’ll be able to see your real-time labor costs at any time, not just the estimates that other providers offer. Federal law requires employers to pay tipped employees a tipped minimum wage of $2.13 per hour.
- For hourly roles like servers, multiple hourly rates by hours worked during the pay period.
- While no one likes letting workers go, this process will help you determine which cuts will be most effective.
- The program is funded by a small payroll deduction (0.373% of an employee’s wages each pay period).
- You’ll save a ton of time because you won’t need to manually enter hours worked.
- This differs from the federal minimum wage for untipped employees, which is $7.25 per hour.
- If you wanted to track your monthly labor costs, you would first add up all costs as outlined above.
The Ultimate Self Service Kiosk For Your Restaurant
